Wyelands Bank financed 'LRB' purchases from Simec

Simec Group, part of the Gupta Family Group Alliance (GFG Alliance), sold biofuel-fired power generators used in "Project LRB" before they had produced any substantive electricity.

The buyers, some of which have close links to GFG Alliance, used funding from Sanjeev Gupta's Wyelands Bank to complete the purchases, according to Companies House filings. Sanjeev Gupta is head of GFG Alliance.

Project LRB, or "Little Red Boxes", involved the internal sale of renewable obligation certificates (ROCs) associated with the generators by Simec Power 1 Limited to Liberty Industries PPA for a period of up to 20 years in late 2017. These ROCs, designed to become available when the diesel generators operated, were securitised with the help of financial services company Greensill and sold to asset manager GAM for around £600mn.

GAM subsequently fired Tim Haywood, who purchased the bonds, amid concerns over his exposure to GFG Alliance. GFG Alliance bought back the bonds using funding provided by Greensill for "Project Delta", the acquisition of assets from ArcelorMittal.

Trans Global Resources, directed by former Liberty employee Tejash Shah, had four charges from Wyelands Bank, three of which were linked to some of the generators. One of those charges, from 19 September 2018, was signed by Rajeev Gandhi, the chief financial officer of Simec Group, and pledged against the share capital of Simec GHR Allt Mullardoch Hydro. Another Wyelands charge on Trans Global Resources was signed by Tejash Shah and witnessed by Smita Patel, a general manager at GFG Alliance, according to her LinkedIn profile.

Peninsular Enterprises also had four charges from Wyelands Bank, with three secured against some of the generators. Again, one was signed by Gandhi on 19 September 2018. Peninsular was already one of Wyelands Bank's largest customers in 2018.

Another company, Gleamink UK, had four charges from Wyelands Bank, again with three linked to generators. One of those was witnessed by Antoine Kohler, an executive at Simec Power Solutions since September 2017. Gleamink was also a large customer of Wyelands in 2018, prior to some of the generator purchases.

Trans Global Resources and Peninsular Enterprises are both registered to 27 Old Gloucester Street, London, alongside many other companies affiliated to Liberty. Elemental, the large company secretary service, is based at the address.

Trans Global, Peninsular and Gleamink all used text that was almost identical in their annual reports to May, June and October 2018, respectively. The text from all three reads: "The company has invested [xxx] in the purchase of fixed assets, being biofuel generator sets with a view to expand its operation from trading of metals into generation and sale of electricity. These generators were purchased towards the end of the accounting period hence no income from electricity production was received."

Between August-September 2017 and April 2018, Trans Global purchased 12 generators for $1.9mn, Peninsular nine generators for $1.8mn and Gleamink nine generators for $1.6mn, according to the charges and annual filings. The three companies are audited by King & King, which audits GFG Alliance companies generating billions in revenue, as well as entities close to the group.

A spokesperson for GFG Alliance confirmed that Simec sold the generators to the companies. Trans Global Resources, Gleamink and Peninsular Enterprises could not be reached for comment.

By Colin Richardson